CINNO Research: The US tariffs have been enforced, and the price increase of panels in March may be reduced.

CINNO Research Chief Analyst Zhou Hua stated that in February this year, the United States' tariff increase on Mexico has not been implemented yet, and the continuation of the domestic "trade-in for new" policy has prompted brand procurement strategies to remain stable. Market demand has been strong in the short term, with panel prices increasing across the board. As we enter March, domestic market brands are stocking up in advance for new product releases and the upcoming 618 shopping festival, maintaining high demand in the short term. With the US increasing tariffs on Mexico by 25% and further imposing a 10% tariff on China, foreign market stocking pace has slowed down, and it is expected that panel prices in March will see a narrower increase. CINNO Research Summary: 01 Market Dynamics and Tariff Impact: The delay in the United States' tariff increase on Mexico in February provided brands with more time to strategically stock up for overseas markets. Domestically, the continuation of the "trade-in for new" subsidy policy and brands preparing for the launch of new models in 2025 have driven the short-term demand in the TV market. Despite panel manufacturers maintaining high utilization rates to meet demand, supply remains tight, leading to a widespread increase in LCD TV panel prices, exceeding market expectations. As we enter March, despite strong demand domestically as brands prepare for the 618 shopping festival, the US tariff increase on Mexico and further escalation of tariffs on China may lead to a rapid decline in overseas market demand, creating a "cool outside, hot inside" market situation. 02 Demand Analysis: Domestically, the "trade-in for new" policy has boosted market confidence, and major brands are actively preparing for the launch of new products in the spring of 2025, with some brands releasing new products earlier than last year and stocking up accordingly. Although panel prices are currently on the rise, overall panel prices are still low compared to March to May last year, so it is expected that some brands have already started stocking up in advance for this year's 618 festival, further boosting short-term demand in the domestic market and providing some support for the increase in panel prices in March. In terms of international market demand, the US has imposed a 25% tariff on all goods from Mexico since March 4 due to issues such as fentanyl, and has imposed a 10% tariff on Chinese products imported to the US (after tax, the tariff on Chinese TVs exported to the US is at least 31.4%, while the tariff on Mexican TVs exported to the US is 25%). This measure will temporarily increase the cost of using TV panels in the US market, potentially leading to an increase in TV end prices in the US, which may suppress consumer demand and have a detrimental impact on panel price stability. 03 Supply-side Dynamics: In February this year, panel orders continued to increase, with the average utilization rate of high-generation production lines in China expected to exceed 85%. As we enter March, domestic market demand is expected to remain relatively stable, while overseas market demand may begin to decline due to the implementation and escalation of tariff policies. Therefore, mainland Chinese panel manufacturers may reduce utilization rates to reduce supply. As a key link in the TV supply chain, the increase in tariffs on exports to the US will inevitably raise operating and logistics costs, and profit margins for US market orders may be compressed. As a result, some panel manufacturers are positioning themselves in advance with overseas factories to avoid direct taxation, and are exploring markets in South Asia and the Middle East to reduce reliance on the US market. 04 March LCD TV Panel Price Forecast: CINNO Research statistics show that under the impact of the US tariff increase, the increase in panel prices in March this year has started to narrow. It is expected that mainstream panel prices from 32" to 65" will see a slight increase of $1 compared to February prices, rising to $35, $67, $96, $121, and $173 respectively. Popular large-size panels such as 75" and 85" have more robust demand in the domestic market, with a potential increase of $2 compared to February prices, expected to rise to $231 and $312 respectively.